The market for Egyptian Ramadan lanterns has been penetrated by Chinese producers of the same commodity. These Chinese producers are capturing market share due to the lower price of their products. What is the factor that is helping Chinese producers keep their prices low?

Question

Quizplus · Accepted Answer

Chinese producers are likely able to keep their prices low due to having a lower average total cost compared to Egyptian producers. This could be due to economies of scale, more efficient production processes, or lower labor costs, among other factors.

The Market for Egyptian Ramadan Lanterns Has Been Penetrated by Chinese